Continental acquires the automotive products business concentrated in the Siemens VDO Automotive AG for €11.4 billion from Siemens AG, Berlin/Munich. The purchase price includes future tax benefits for Continental the net present value of which has been determined at approximately one billion Euro and which do not result in any loss of revenue for the fiscal agencies. The supervisory boards of Siemens AG and of Continental AG approved the transaction in Munich and Hanover respectively on Wednesday. Execution of the acquisition is contingent on the approval of the appropriate antitrust authorities.
On the basis of 2006, Continental and Siemens VDO realize aggregate annual sales of around 25 billion euros with a workforce of close to 140,000. Thus, Continental advances to a position among the top five worldwide in the automotive supply industry.
Continental anticipates a net synergy potential in the order of at least €170 million a year as of 2010. Assuming no delays in antitrust clearance, closing of the transaction should occur towards the end of the fourth quarter. Integration will be concluded by the end of 2009.
Continental has secured a financing package that is targeted at meeting its goal of attaining a continued solid credit rating of BBB or Baa2. Continental is currently rated BBB+ and Baa1. Neither the sale of the ContiTech-division nor of any of the tire divisions is planned.